Export of goods had started soon after the independence of india and a proposal had been led before the Export Advisory Council, The governing body and export council saw various issues that had been faced by exporters and invented a Export Credit Insurance Scheme and a proposal on the scheme was drafted & presented to the Export Advisory Council in 1955.
The governing body had appointed Shri T.C.Kapur as the Chairman and under his surveillance formed a committee to examine the pros and cons of export credit risks for setting up an effective organization to provide insurance which further led as the Export Risk Insurance Corporation (ERIC) registered in the month of July 1957 in Mumbai as a Private Ltd. Company, solely owned, operated and managed by the ownership of Ministry of Commerce and Industry, Government of India. Shri Ratilal M Gandhi was nominated as the First Chairman and Shri T C Kapur was the First Managing Director of the Corporation and the first Policy was issued on 14th October 1957.
Which later got changed in 1964 to EXPORT CREDIT & GUARANTEE CORPORATION LTD., and in august 2014 which was again renamed as ECGC LTD.
ECGC has been established to support and help the fellow Indian exporters by presuming, promoting Indian export cover insurance for credit risk taken for delivering export orders and services. ECGC has kept modifying and enhancing different export credit risk insurance products to support the needs of Indian exporters. ECGC seeks to improve the competitiveness of the Indian exports globally by providing exporters and export facilities with credit insurance covers. The organization has also made various export credit insurance schemes to help commercial banks providing export credits. The insurance facilitates the banks to provide export credit facilities to exporters by keeping the ECGC premium rates at the best supportive rates.
What does ECGC insurance or policy do?
- Covers a array of insurance to support Indian exporters against the risk of payment realization of export order returns whether it involves commercial or political risks.
- Policy provides cover against insolvency of the importer or buyer, due failure to make the payments within specific time frame or buyer dosen’t accepts the goods or NO fault of the exporter.
- Variety of credit insurance covers given to banks and other financial institutions to provide them to extend credit facilities to indian exporters.
- Also provides Overseas Investment Insurance to Indian companies/ businesses investing in collaboration joint ventures abroad by facilitating in the form of equity or loans
- It also helps exporters by giving them credit ratings of buyers with its own information collected by them, country wise in regards to payment recovery.
- Makes exporters easy for supporting with export finance from their banks/financial institutes
WHY IS THERE A NEED FOR HAVING A CREDIT INSURANCE IN EXPORTS?
As you all know insurance is always beneficial for businesses which helps us during business deals and payments are always at risks when doing an export import business. There may arise several risks due to commercial, political, economic changes taking place worldwide, payments can be delayed with due reasons which may lead a country to impose restrictions on either import of goods or having a bad credit record for trade. Export credit insurance is designed to save exporters from facing the consequences of the payment risks, and going bankrupt by any means either political or commercially, and to freely expand their overseas business without fear of losses.
As ECGC is an insurance for the safety of exporters they do have certain charges in order to undergo their facility with premium rates between 6 paise to 13 paise per month for Rs 100 of cover, which totally depends on the risk involved on claims and stress in the sector. The highest Rates that would be Rs 13 paise with the highest risk or extremist.
Types of products or services offered by ECGC LTD.;-
EXPORT CREDIT INSURANCE FOR EXPORTERS
ECIE Short Term – Turn Over Based
- Shipments Comprehensive Risks Policy (SCR)
- Small Exporters Policy (SEP)
- Specific Shipment Policy (SSP)
- Services Policy (SRC)
- Export Turnover Policy (ETP)
- Export (Specific Buyers) Policy (BWP)
- Consignment Exports Policy (Stockholding Agents) – (CSA)
ECIE Short Term – Exposure Based
- Buyer Exposure Policy (BEP)
- IT-Enabled Services Policy Single Customer (SITES)
- Micro Exporter Policy (MEP)
- Software Project Policy (SPP)
ECIE Medium & Long Term
- Construction Works Policy (CWP)
- Specific Policy for Supply Contract
- Specific Shipment Policy (SSP)
- Specific Services Policy (SRC)
EXPORT CREDIT INSURANCE FOR BANKS
ECIB Short Term Pre-Shipment (PC)
- Individual Packing Credit (INPC)
- Whole Turn Over Packing Credit (WTPC)
- Branch Wise Packing Credit (BWPC)
ECIB Short Term Post-Shipment
- Individual Post Shipment (INPS)
- ECIB – INPS (with Exclusion)
- ECIB – INPS (without any Exclusion)
- ECIB – INPS (Not Holding Standard Policy)
- Whole Turnover Post Shipment (WTPS)
- Export Finance
ECIB Short Term Cover Against Bank Guarantee
- Export Credit Insurance For Banks – Surety Cover (ECIB SC)
- Advance Payment –Cum Performance
ECIB Medium & Long Term
- Individual Packing Credit (INPC)
- Individual Post Shipment (INPS)
- Export Performance (EP)
SPECIAL SCHEMES
- Factoring
- Buyer’s Credit Cover
- Lines Of Credit Cover
- Overseas Investment Insurance
- Customers Specific Covers
- NEIA
